Research and Federal Universities....................................................................................................... 5.4.3. Scientific-Educational Centers as a Form of Integration of Education and Research................................................................................................................... 5.4.4. Formation of a World-Class Scientific Base: Megagrants on Creation of University Laboratories................................................................................................ 5.4.5. Modifications in the Research Infrastructure of Science........................................................... 5.4.6. Small-Sized Innovation Businesses........................................................................................... 5.4.7. Large Corporations: Creation of the System of Incentives to Innovation................................. 5.4.8. Development Institutions in the Concept of “Innovation Lift”..................................................

5.4.9. Technological Infrastructure of Innovation Activity................................................................. 5.4.10. Technological Platforms as a new Mechanism of Creation of New Ties............................... Section 6. Institutional Issues..................................................................................................................... 6.1. Public Sector Status and Privatization Process.................................................................................. 6.1.1. Public Sector Share of the Russian Economy............................................................................ 6.1.2. Privatization Policy.................................................................................................................... 6.1.3. Updates to the Law on Privatization.......................................................................................... 6.1.4. Enhancing corporate governance of business entities with state participation......................................................................................................................... 6.1.5. State participation in the economy and structural policy........................................................... 6.1.6. Budget effect of the state property policy in the period between 2000 and 2011.................................................................................................. 6.2. “New Privatization Policy”: Risks, Stakeholder Groups, Constraints, Potential Innovations............................................................................................................6.2.1. “New privatization policy” background.....................................................................................6.2.2. Stakeholder groups and principal risks.......................................................................................6.2.3. “New dimension” of denationalization.......................................................................................6.3. Russian Financial Development Institutions: Their Rise and Main Challenges on the Path toward Improvement of Their Performance.........................................................6.3.1. Main Stages of the Rise of the Russian System of Financial Development Institutions..................................................................................................6.3.2. The Development Institutions’ Operational Objectives and Priorities, and Conditions of Projects Support...............................................................................Purposes:...............................................................................................................................................6.3.3. Assessment of the Scale and Outputs of the Development Institutions’ Performance, Main Tendencies and Recent Critical Changes.........................................6.3.4. Critical Challenges and Possible Ways of Improvement of the System of Public Financial Development Institutions with Regard to Support of Innovation Activity....................................................................................6.4. Bankruptcies in 2009–2011: Post-crisis Dynamics; New Trends; Regulation...................................6.4.1. Dynamics of Bankruptcies (2009–2011)....................................................................................6.4.2. Bankruptcy Legislation in 2009–2011........................................................................................6.5. Self-Regulated Organizations – the Evolution of the Law (2007–2011)...........................................6.5.1. Federal Law of 01.12.2007 No. 315-FZ «On self-regulated organizations”.............................6.5.2. Development of the SRO general laws in 2008–2011................................................................6.5.3. SRO legal regulation by special laws and its development in 2008–2011.................................6.5.4. Development prospects of the SRO legislation..........................................................................6.6. Russian Market for Real Estate..........................................................................................................6.6.1. The Land Market........................................................................................................................6.6.2. Price Situation on the Housing Market.......................................................................................6.6.3. Revitalization on the Real Estate Market....................................................................................6.6.4. Dynamic of Placement of new Housing in Operation and Prospects for Institutional Development of Housing Provision Mechanisms.......................................................................................................6.6.5.

The Home Loan Sector...............................................................................................................6.6.6. Outlook for the Housing Market.................................................................................................6.7. Military economy and the military reform in Russia..........................................................................6.7.1. Structural transformations of the Armed Forces.........................................................................6.7.2. The RF military policy and its implementation..........................................................................6.7.3. Improvement of the legal and regulatory framework of the Armed Forces operation.............................................................................................................6.7.4. Changes in the military staffing policy.......................................................................................6.7.5. Social support to the servicemen and their family members......................................................6.7.6. Military and financial policy.......................................................................................................6.8. Strategy of Socio-Economic Development of the North-Caucasian Federal Okrug: the First Steps.............................................................................Section Socio-political Context Section 1. Socio-political Context 1.1. Economics and Politics in 2011: the Global Crisis and the Quest for a New Growth Model 1.1.1. The Results and Lessons of the Year Russia’s socio-economic development in 2011 was determined primarily by two factors:

the forthcoming elections on the one hand, and the global economic crisis on the other. Although they considerably differed both by the force and the vectors of their impacts, it was nevertheless these two factors that had predetermined the behavior of all the subjects involved in the economic and political life.

So far, the global crisis has had no negative influence on the Russian economy (see Table 1). We may point to three main mechanisms through which the world economy is influencing contemporary Russia: demand for exported commodities; access to investment resources (direct investments and credits); and demand for Russian securities on the stock market. Of course, the slow rate of growth of the world economy was bringing down the demand for Russian exports. However, the prices for the basic exported commodities remained high, although the rate of their growth was lower than in some of the pre-crisis years. Russia’s stock market is very vulnerable to the effects of external shocks, which was confirmed by the events of August–September 2011, but so far it has not been playing a prominent role in ensuring this country’s economic growth. The volume of external borrowings attracted by the corporate sector continued to be on the rise, thus surpassing its pre-crisis level. At the same time, the understanding of the lengthy character of the global crisis, with its unpredictable geo-political and geo-economic outcomes, has had some impact on the formation of Russia’s economic policy in the medium term.

The standard mechanisms whereby elections influence one or other society’s economic life are the increasing uncertainty of future economic policy and the equally increasing populism of any authorities striving to be reelected. Both mechanisms have turned out to be effective for Russia in 2011, in spite of the fact that the probability of power remaining in the hands of the ruling party and its leaders seemed to be exceptionally high to everybody – in other words, they did not need any large-scale financial investments in order to ensure public support. However, this fact did not prevent the country’s leadership to declare their intention to make some big investments, in the next few years, mostly in the public welfare sphere and the power structures.

Over the past year, Russia demonstrated a sufficient stability of her economic development. Economic growth remained moderate and, on the whole, quite natural for a country with a medium level of economic development – higher than in Germany but lower than in China. In formal terms, the macroeconomic parameters remained favorable – the budget by that year’s results was executed with a surplus of nearly 1% of GDP, while the inflation rate dropped to its historic low for the entire 20-year period of Russia’s post-communist existence.

In the sphere of monetary policy, the RF Central Bank managed to switch over to a floating currency exchange rate and inflation targeting. This has been the most important institutional achievement of the past decade.